Why Does Insulin Cost More Than Ever? It’s All In The Way It’s Made

Banting Gives It Away – Insulin was discovered in 1921 by Fred Banting and Charles Best. In a generous gesture that unfortunately didn’t start a trend, they sold the patent for a dollar so that cheap insulin would quickly become available. It worked like a charm: within two years, Eli Lilly had sold 60 million units of its purified extract of pig and cow pancreas.

Patents Premiere – The first insulin did not last long in the body, forcing people with diabetes to inject themselves several times a day with the sword-like needles that were available at the time. In the 1950s, longer-acting insulin was developed to reduce the number of painful injections. Each improvement came with a patent, and each patent came with a price increase. Still, even with the new patents, insulin was fairly cheap. Many people recall paying less than a dollar a vial for insulin in the 1960s. Even in 1975, our former editor-in-chief paid only $2.99 a bottle.

The Era of Biologics – In 1978, researchers at the biotech company Genentech did something that had never been done before: they manipulated bacteria into making human insulin. Insulin became the first pharmaceutical biologic; that is, a protein made biologically, by living organisms, instead of chemically. The making of insulin as the first biologic was the dawn of the biotech era.

Eventually, yeasts were also used as tiny insulin-making factories. Once the gene for human insulin was inserted into one yeast DNA, the yeast did what yeasts do: it multiplied ad infinitum, and each new yeast came with a little copy of human insulin. This breakthrough, naturally, carried with it a big, profit-making patent.

Advance of the Analogs – In 1996, the Food and Drug Administration approved the first insulin analog. Newer insulins are called analogs because they’re analogous to human insulin: like it, but not quite exactly. Before being put into the yeast, the human genetic material is slightly changed, to produce slower or quicker acting insulin, for instance. Each one of these improvements comes, of course, with a patent. And all these patented insulins cost – big time.

Where’s the Generic? – Eventually, patents do expire. And when patents expire, generics generally leap into the market. Why not generic insulin? Because even though biologics have been on the market since the 1980s, the FDA has never told the generic companies how they can get generic biologics approved. There are no official guidelines for approval of generic insulin.

Generic Shortcuts – Insulin guidelines would need to answer one basic question: whether generic insulin manufacturers can use the usual generic shortcuts to approval. When generic manufacturers copy standard drugs, they aren’t forced to repeat the exhaustive clinical testing that the drugs went through to get approved in the first place. All they need to prove is that the generic version contains the same active ingredient as the name brand, in the same purity, quality, and strength. The generic maker isn’t forced to start from scratch and re-prove the drug’s safety and effectiveness. This shortcut is called “piggybacking” on the clinical studies originally done by the drug company that invented the drug.

FDA Guidelines Are a No-Show – Because the FDA has not supplied guidelines to the generic companies on how to achieve approval of generic insulin, they don’t know what to do. Can they piggyback or not? The FDA said in 2001 that it was developing guidelines for approving generic insulin, but it never did. Now the FDA says that it no longer plans to issue guidelines for each biologic medicine, one by one. Instead, it’s announced that it will develop global guidelines applicable to all biologic generics, from simple insulin to the latest super proteins. This announcement has caused a lot of protest because such complex guidelines would take much longer to produce than a single set of guidelines targeted to insulin alone.

No Piggybacking for Biologics, Says the BIO – Some say the FDA’s foot-dragging has been influenced by lobbyists from the Biotechnology Industry Organization (BIO), which represents the biotech pharmaceutical companies. The BIO says that the shortcuts awarded to conventional generic drugs don’t apply to biologics, even simple ones like insulin. According to the BIO, the critical element in regular drugs is simply the active ingredient, but for biologics, it’s different: it’s all about the little creatures in the manufacturing process, and that’s much more complex.

Just Give Us A Guideline – For safety reasons, Novo Nordisk and Lilly both oppose the FDA allowing generic insulin to piggyback without repeating clinical studies. But generic drug makers note that biologic insulin has been around since the eighties. It’s relatively simple, they say, and costly clinical trials would only raise the price prohibitively high. They concede that the approval process for generic biologics should be more stringent than for conventional generic drugs. They just want some guidance from the FDA so that they can get started.

Patents Pending – In any case, some biotech companies are beating the generics to the punch by manufacturing cheap editions of their own expired patents. For instance, Novo Nordisk makes ReliOn/Novolin, which is simply its patent-expired biologic human insulin. It’s sold at Wal-Mart for $19.96 a vial.The problem is, most people favor the newer insulin analogs over the older varieties of insulin. That’s one reason the big pharmaceutical companies aren’t too worried. Even if FDA guidelines are created and generics do make it to market by 2008 or 2009, the major companies don’t expect to lose many patients to generics. Insulin analogs themselves could become targets for generics in 2014, when their patents begin to expire. But by then, the major drug companies are confident that they will have newly patented next generation insulins on the market.

Power to the Diabetic People – In spite of everything, consumers do have influence when it comes to generic insulin, if they choose to wield it. As well-known diabetes blogger Scott Strumello states, “Regardless of which insulin we use personally, we should not tolerate regulatory inaction regarding generic insulin. All people with diabetes should urge their legislators to support legislation that removes barriers to price competition in the insulin market.”

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